The Labor Movement's Dangerous Wish List

The new political alignment in Washington has revived the fortunes of the nation’s labor unions, whose power and authority have diminished radically since the 1960s.In the spring, the new Democratic president engineered a partial government takeover of General Motors that was largely designed by and for the benefit of the United Auto Workers, which had worked tirelessly on his behalf and on behalf of the sizable Democratic majorities in the House and Senate. But this remarkable intrusion into the marketplace was not, in fact, the top item on organized labor’s wish list for the year 2009. That honor goes to the Employee Free Choice Act, a two-year-old measure that failed to clear the Senate when it was first introduced in 2007 (and would have been vetoed by then President Bush in any case). The new act was hotly debated in the early months of 2009 and remains on the Democratic party’s agenda, just below health-care reform.

The bill’s chief provisions authorize union formation in a workplace by “card check”—a euphemism for replacing a secret-ballot election on the potential unionization of a workplace with a system by which unions could secure exclusive bargaining rights through authorization cards that would be signed in the presence and with the oversight of union organizers. It would dictate rules favorable to unions and imposecollective-bargaining agreements by mandatory arbitration. And it would provide for liquidated damages and fines of $20,000 every time a business is found to have “interfered” with the “right to organize.”

Supporters and detractors agree that the measure would transform federal labor law as it has more or less functioned since the passage of the National -Labor Relations Act (NLRA) more than 70 years ago. No wonder that organized labor has deemed the passage of the Employee Free Choice Act its “number one legislative priority” and has undertaken a vigorous national ad campaign on its behalf. Business groups and fiscal conservatives have responded in kind.

Proponents of the bill insist that legislation is necessary to prevent management from depriving workers of their right to organize. Opponents contend that the new bill is an extreme solution to a phantom problem. With the announcement in April by Senator Arlen Specter—soon followed by a group of moderate and conservative Democrats—that he would not support the measure in its current form, talk turned to a “compromise” that would eliminate the politically toxic card-check provision while still seeking to overhaul existing law. Now, however, Specter has changed from Republican to Democrat, is facing a stiff primary challenge inside his new party, and is beginning to signal that he may change his mind about card check to save his skin.

In the midst of all this, surprisingly little attention has been paid to the state of existing legal arrangements and whether there is some gross malady in them that necessitates a legislative cure. It is instructive, then, to explore the structure of federal labor law and the constitutional parameters in which it operates, the extent to which it serves its stated function, and the impact some of the compromise proposals might have on the state of labor relations in America.

The percentage of the U.S. workforce that is represented by a union now stands at below 8 percent—a steep drop from the peak, in 1956, of 38 percent. According to a December 2006 poll conducted by the AFL-CIO, “nearly 60 million U.S. workers would join a union if they could.” If true, that number would constitute about 43 percent of the 140 million Americans in the workplace. Labor activists claim that employees are intimidated from organizing by their employers, and in ever more sophisticated ways. Workers are illegally fired (the argument continues) during one-quarter of all organizing attempts; in 2005 alone, such purges purportedly claimed 31,000 jobs. Eliminate management mischief through measures like the new bill, they say, and union membership would soar to its natural level.

The 60 million number is, to put it mildly, highly suspect. The findings have never been duplicated even remotely by any other public poll, and the union has not released the poll’s underlying methodology. A series of other studies suggests that an overwhelming majority of American workers are content without union membership. Earlier this year, a poll by the Opinion Research Corporation of Princeton found that 82 percent of nonunion respondents did not wish to organize. Similarly, 81 percent of respondents in a March Rasmussen poll said they did not wish to be represented by a union.

Such results are nothing new. A 1999 Gallup survey asked participants “Would you personally like to belong to a labor union at work, or not?” Twenty-one percent answered yes, while 76 percent answered no. A 2006 Zogby poll posing the same question showed 19.8 percent in favor and 74 percent opposed. (The polls do not factor out those employees, like supervisors, who would be statutorily prohibited from organizing, so the percentage of eligible workers who want unionization is likely even lower.)

The United States is not alone in seeing a decline in union participation over recent decades. A 2006 study at the Amsterdam Institute for Advanced Labour Studies observed the same trend across industrialized Western countries and cited, among other factors, “the rise of service employment, slower growth—or even decline of government employment (‘privatization’), much higher (long-term) unemployment rates (especially in Europe), the increased use of flexible employment contracts, also the lower inflation rates and the control of inflation by means of tighter monetary policies.” The libertarian legal scholar Richard Epstein notes that after a liberal government in New Zealand restored labor-friendly policies in the 1990s, there was no noticeable increase in union membership. “The key point,” he concludes, “is that any effort to attribute the decline in the American market to distinctive factors of our own system of labor law sorely misses the point.”

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The reasons are not hard to fathom. The indelible image from the formative years of the American labor movement of an uneducated worker bound to a single ruthless employer and performing treacherous manual labor is a far cry from the more sophisticated and mobile workforce of the present day. Organized labor is a victim of its own success. The progressive developments that originally gave birth to the NLRA have continued to expand the panoply of worker rights and benefits. Under federal and state law, and without union assistance, employees may enjoy such benefits as overtime, family leave, pregnancy leave, time off for voting, protection from discrimination, protection from unsafe working conditions, disclosure of workplace hazards, and timely payment of wages. Just to be competitive in the -marketplace, many companies offer an array of benefits, from vacation and sick leave to health-care coverage and pension plans.

The claim that employees who want to join a union are prevented from doing so is based almost entirely on the research of Kate Bronfenbrenner, a former union organizer who in 2005 published a survey of leaders in more than 400 organizing campaigns, as well as a smaller study by the union-backed group American Rights at Work. The reliability of such data is as questionable as a survey of management attorneys alleging that union officials engage in intimidation would be. The 31,000 workers said to have been fired for organizing activity in 2005 is, in fact, the total number of employees who received compensatory back pay for any reason, including innocuous mistakes in the accounting of the work hours they logged.

Data from the National Labor Relations Board (NLRB), hardly a management stooge, reveal that employers in fact rarely fire workers during organizing drives and that unions actually win most organizing elections. A study by the Center for Union Facts examined NLRB data for the period 2003-05, matched reported unfair-labor-practice claims with filed union-organizing efforts, and determined that companies improperly fired workers in just 2.7 percent of such efforts. During that time, unions won 61 percent of workplace elections.

The number of elections resulting in unionization has remained remarkably stable over the past 15 years, suggesting that a small and constant percentage of the workforce wants and is able to obtain union representation. It is true that the total number of elections conducted by the NLRB is lower than it was a decade ago (1,579 in 2008 versus 3,300 in 1998). But again, it is not clear that this decrease is the result of illegal employer behavior as opposed to the lack of demand for unionization—or alternative unionization methods, in which unions persuade employers to enter into so-called neutrality agreements and/or to accept elections without a secret ballot.

There simply has been no spike over time in federal unfair-labor-practice charges, according to -Peter Kirsanow, a former member of the NLRB. Nor has there been a rise in the number of petitions seeking interim injunctive relief or so-called Gissel bargaining orders (the remedy when employer misconduct is so severe as to require that the employer simply recognize the union). To accept the claim, one would have to assume that employers are engaging in widespread illegality and that unions are ignoring it by failing to pursue easily available legal remedies.

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Apart from questions of lawbreaking, proponents of the new bill claim that the playing field is arrayed against organized labor in unionization efforts. The process takes too long, giving management a chance to regroup and “lawyer up” for expensive and prolonged proceedings that discouraged workers cannot hope to keep up with. As the AFL-CIO’s associate general counsel testified in a 2007 House subcommittee, organized labor continues to assert that current law “acts as a sword which is used by employers to frustrate employee freedom of choice and deny them their right to collective bargaining. When workers want to form a union to bargain with their employer, the NLRB election process, which was originally established as their means to this end, now provides a virtually insurmountable series of practical, procedural, and legal obstacles.”

Again, the facts suggest otherwise.

In its 2007 annual report, the NLRB reported that the average time between receiving an election petition and holding an election was 39 days. No less than 93 percent of all elections were conducted within 56 days, the lowest figure in 28 years. Considering the logistical issues involved—posting and mailing notices, ordering voting booths, determining the parameters of the bargaining unit—the process can be said to be rather swift.

It strains credulity to suggest that employers in 2009 are more aggressive or more prone to intimidate workers than they were in the 1940s and 1950s, when labor strikes often turned violent and the tenor of labor relations was confrontational and hostile. More than anything else, today’s businesses dread the adverse publicity of boycotts and picket lines and are far less inclined to engage in hardball tactics.

Finally, the attempt to pin the blame for falling rates of unionization ignores economic realities that are reported daily by national and local media and are known anecdotally to most Americans. The percentage of the American workforce represented by unions has and will naturally decline as unionized firms like GM and Chrysler shed employees. Since unions have ratcheted up wages and secured benefits greatly in excess of those available to nonunionized workers (both domestically and internationally), that pattern can be expected to continue.

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To hear the arguments of those in support of the new legislation, there is something amiss with the law as it stands so long as unionization rates remain low. The implication of this argument is that the existing law has favored management when in fact government should assist in the unionization of workplaces. As Harley Shaiken, a professor of law at Berkeley, argues, labor supporters contend that in the current landscape “joining a union has become a risk, not a right” and that there is a national interest in reversing the trend away from unionization, which he contends has contributed “to a squeeze on the middle class, rising inequality, and an erosion of democratic values.”

Is this in fact the architecture of federal law? How indeed do those who maintain that a union is necessary to protect their interests fare under current labor law? Section 7 of the National Labor Relations Act (as modified by the Taft-Hartley Act of 1947) sets the basic principle underlying federal labor law:

Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected byan agreement requiring membership in a labor organization as a condition of employment.

The words I have put in bold type are all too often ignored in current discussions. If there is a constant theme running through federal labor law since 1947, it is one of studied neutrality. Government does not compel or urge union membership, nor does government inhibit or discourage it. Neither union speech nor employer speech is limited unless it becomes threatening or coercive.

In congressional testimony in March, the former solicitor of the Department of Labor, Eugene Scalia, explained:

Among the most fundamental principles of American labor law since enactment of the National Labor Relations Act is that a company is required to bargain with a union in good faith, but is not required to accede to any particular contract term. . . . It was one of the Supreme Court’s first observations about the NLRA—in the decision upholding it from constitutional challenge—that “the act does not compel agreements between employers and employees. It does not compel any agreement whatever.”

Given the parlous experience of heavily unionized industries in the U.S., including the steel and car industries, and the burdens that union rules about seniority and staffing impose on companies, employers would be foolish not to exercise their First Amendment rights. Left to their own devices, union organizers certainly will not necessarily explain to workers unfamiliar with union contracts the potential downside of unionization, the demands of a global marketplace, the implications of seniority systems for younger workers, or the fact that they may be obligated to strike and may be subjected to fines for crossing a picket line.

In addition to respecting First Amendment rights of both parties, federal labor law must also function within the context of the property rights of employers. Business owners have a protected property right in their operations under the Fifth and Fourteenth Amendments. Those rights have consistently been given deference by the NLRB (there is “no statutory right . . . to use an employer’s equipment or media”) and the courts, and serve as a counterweight to the right of unions to gain access to the workplace.
Finally, the new law’s proponents contend that current labor law lacks meaningful, harsh penalties that might curb the alleged surge in illegal employer conduct. In a number of interviews, the president of the Service Employees International Union, Andy Stern, has insisted that “penalties are inadequate” and that “real penalties” are needed to curb employer abuse. It is true that existing law lacks civil and punitive damages for either labor or management in the context of organizing efforts. But the remedies with regard to union-organizing are quite ample. Employers face orders to reinstate improperly fired employees with back pay and interest and can be ordered to recognize and bargain with the union if found to have prevented a free and fair election from taking place. It is little wonder that the first instruction that management counsel provides to clients facing an organizing effort is “Don’t fire anyone.”

Critics of the labor law on the books forget that the primary weapon in labor relations was never supposed to be the heavy hand of governmental sanctions but the parties’ ability to utilize economic weapons—the strike or lockout—to obtain desired economic ends. The ability to wield these weapons (and the fear that the other side would as well) was seen as the primary means of obtaining economic advantage and -ultimately reaching agreement. Government’s role was to serve as referee, not player.

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The prospects for passage of the card-check provision have indeed diminished since the heady early days of the Obama administration. Moderate Democratic lawmakers seemed to have lost heart last spring, and influential liberals like George McGovern and Warren Buffet have spoken in defense of secret-ballot elections. Labor leaders including Andy Stern and Richard Trumka, the new head of the AFL-CIO, have begun to hint that card check itself is not essential. But then there is Arlen Specter, new Democrat, facing an aggressive primary challenger next year. His mind seems to be wonderfully concentrated by the prospect of a political hanging next year partially engineered by labor unions. Provided he can round up support from moderate Democratic colleagues, Specter might prove the key to bringing card check back from limbo just as he was the key to stopping its passage in the spring.

But even if the card-check provision is dropped, there are other aspects of the new bill that are far-reaching and troubling—primarily, provisions for compulsory arbitration and punitive fines. To a greater extent than may be apparent at first glance, these are likely to increase acrimony in American workplaces at a time when employers and workers most need to work collaboratively to restore growth and prosperity.

The notion that current penalties (e.g., reinstatement with back pay, orders to bargain) are insufficient to curb employer misconduct is questionable in the extreme. As I noted above, in this day of heightened media attention, most employers fear the notoriety that may accompany the branding of their behavior as an “unfair labor practice” and the potential loss of government contracts and public goodwill.
Moreover, in this case the cure may be worse than any potential benefit. A new regime of stiff monetary penalties will encourage firms to hire lawyers and fight each and every adverse ruling (which would then carry a large price tag). This will only foster a more contentious relationship with unions—precisely the results the drafters of the original National Labor Relations Act sought to avoid. If organized labor’s concern now is that employers delay proceedings, employers will have every incentive to increase their litigation efforts if substantial fines are at stake.

There is also the matter of the scheduling of union elections. The new legislation’s proponents are hinting at a “compromise” that would mandate an absolute limit on the period of time from the filing of a claim for union representation to an election. Rather than operate in-system with a median time of 39 days, some have suggested a fixed deadline of 20 days or even a week or two. The aim here is obvious: curb the time that employers will have to make their own case to employees.

The result of a truncated campaign period would likely be twofold. For larger employers, the prudent course would be to exercise hypervigilance and maintain a nonstop effort to disabuse employees of the benefits of unionization. Rather than discussing workplace innovation or cooperative efforts, employer communications would perpetually be seasoned with anti-union advocacy. As Epstein notes, such an unintended consequence would be “totally destructive” to what should be occurring in workplaces—to wit, voluntary efforts to improve morale and productivity.

In addition, a huge competitive advantage would accrue to large firms with ample budgets for lawyers and human-resource professionals. Small businesses would be hard-pressed to devise any response to the union before election day. These engines of ingenuity and new employment are already struggling to deal with a growing labyrinth of government regulations that entrench larger firms in their place. Such a provision would add yet another blow.
Proponents have also hinted at a compromise that would entail imposing limitations on employers’ property rights (which have consistently been given deference by the NLRB courts), with the purported goal of helping organizers gain access to employer facilities. Proposals to require employers to open their doors and e-mail systems to outsiders raise a host of constitutional and political issues. “Free access” would also raise logistical concerns about security, confidentiality, and illegal “surveillance” by employers, embroiling all the parties in years of litigation.

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The potential impact of the Employee Free Choice Act is plain to see: government would no longer promote a level playing field between management and labor but would instead join laborat the bargaining table. At a time when unemployment is heading for double digits and employer resources are desperately needed to find cooperative solutions for a range of workplace challenges, such a massive reorientation of federal labor law would severely test the resiliency of the American economy. In a global economy in which tax, labor, and regulatory burdens already encourage American businesses to relocate their operations overseas, we would quickly find out just how many employers will take the easy route of escape from a system in which the thumb of the federal government presses down firmly on one side of the scale.